Initial Investment Cost
The following costs are excerpted from the 2012 Pizza Hut, Inc. Franchise Disclosure Document. The costs shown are for building a new inline/endcap "Delco Lite" Delivery/Carryout restaurant.
The minimum financial requirement to open a Pizza Hut franchise in the United States is $700,000 Net Worth and $350,000 in liquid assets.
1. If you use YRSG’s services, you will pay YRSG a fee that varies depending on the number and type of services provided and includes any reimbursable fees, costs and other expenses as provided in the Pizza Hut Development Services Agreement. These amounts are based on YRSG's current programs and the services provided under the Pizza Hut Development Services Agreement. See Item 5.
2. Subject to credit requirements, some vendors may require payment 30 days after the invoice date.
3. Land, building, and site improvement costs vary depending upon location and size of land and building, and on whether the land and building are owned or leased. The typical number of square feet required for Restaurants is 2,500-4,000 for a "Red Roof" Dine-In Restaurant, 1,400-1,600 for a "Delco" Delivery/Carryout Restaurant and 1,000-1,200 for a “Delco Lite” Delivery/Carryout Restaurant.
4. Restaurants offering delivery are not required to provide delivery vehicles (they may rely on employee-owned vehicles). If you acquire your own vehicles, costs will vary depending upon the type of vehicle and whether it is owned or leased.
5. See Item 11 for a complete description of the Computer System and your obligations concerning it.
6. This is an estimate of your initial start-up expenses, taking into account that a Restaurant is essentially a cash business. These funds consist of preopening expenses (including training ), initial employee wages, insurance premiums, licenses, permit costs, recruitment, and other variable costs (such as initial utility bills, paper products, and cleaning and other supplies). These figures are estimates, and we cannot guarantee that you will not have additional expenses starting the business. Your actual costs will depend on many factors, such as: your management skill, experience, and business acumen; local economic conditions; local market conditions; prevailing wage rates in your community; competition; and the sales level reached in the period covered.
7. Miscellaneous costs consist of pre-opening and grand opening expenses, such as training, utility deposits, restaurant set-up, etc.
8. PHI recommends an 18-week advertising campaign to drive sales from new "Delivery" and "Delco" restaurants. The advertising campaign is not required, but PHI believes that it effectively increases sales. This figure excludes national and co-op dues.
9. Start-up "Other" costs consist of new unit office supply package, banners, forms, and uniforms.
10. On those costs that are not fixed, PHI does not expect your costs to increase beyond inflation in the relevant industry segment unless the supplier's costs increase due to shortages, catastrophes, strikes, Acts of God, or other causes beyond the supplier's control.
11. If you sign one or more Development Agreements for new Restaurants, not in connection with an acquisition of existing Restaurants from PHI or its subsidiaries, you must pay PHI a development fee of $25,000 for each Restaurant. The Development Agreement will specify the date by which the Restaurant must be open for business. If you open the Restaurant by the scheduled time, PHI will apply the development fee to the Initial Franchise Fee for the Restaurant. If you do not open on time, PHI will retain the development fee and will be free to develop the area or to franchise it to a third party. The development fee is not generally refundable. Please refer to the Development Agreement attached as Exhibit K to this Disclosure Document.
If you purchase existing Restaurants from PHI or its subsidiaries, and you are required to develop new Restaurants, you will be required to pay PHI $50,000 in development fees for each new Restaurant location at the time you purchase the Restaurants. If you open the Restaurant by the scheduled time, PHI will apply one-half of the development fee to the initial franchise fee that would otherwise be due and PHI will refund to you the other half of the development fee. If you fail to open the Restaurant by the scheduled time, PHI will retain the entire development fee and will be free to develop the area or to franchise it to a third party. Please refer to the Development Agreements attached as Exhibit M and N to the ASA (Exhibit E).
“Red Roof" restaurants include "End-Cap" Dine-In restaurants that meet the minimum Brand Standards, as well as freestanding Dine-In restaurants.
PHI relies on its 50-plus years of experience to compile these estimates. You should review these figures carefully with a business advisor before you decide to purchase the franchise. As a matter of policy, PHI does not offer financing directly or indirectly for any part of the initial investment. Your ability to obtain financing will depend on a number of factors, such as the general availability of financing, your credit worthiness, collateral you may have, and lending policies of individual financial institutions. These estimates do not include any finance charges, interest, or debt service payments.